Government of India
Ministry of Finance, Department of Revenue
Central Board of Excise & Customs
Circular No. 37 / 2013-Customs
New Delhi, dated 14th September, 2013
To
All Chief Commissioners of Customs/Customs (Prev.)
All Chief Commissioners of Central Excise/Customs & Central Excise
All Director Generals under CBEC
All Commissioners of Customs/Customs (Prev.)
All Commissioners of Central Excise/Customs & Central Excise
Subject: All Industry Rates of Duty Drawback effective 21.09.2013 - Reg.
Ma’am/Sir,
The Ministry has notified the revised All Industry Rates (AIR) of Duty Drawback
vide
Notification No. 98/2013-Customs (N.T.), dated 14.09.2013. This
notification comes into force on 21.09.2013.
- Some of the broad aspects, from amongst the changes notified with respect to
AIR of duty drawback and entries in the Schedule, are the following –
- As in previous years, the drawback rates have been determined on the basis
of certain broad average parameters including, inter alia, prevailing prices of
inputs, standard input output norms, share of imports in input consumption, the
applied rates of central excise and customs duties, the factoring of incidence
of service tax paid on taxable services which are used as input services in the
manufacturing or processing of export goods, factoring incidence of duty on
HSD/Furnace Oil, value of export goods, etc. Many items, but not all, that were
already covered under the drawback schedule prior to incorporation of erstwhile
DEPB items, shall see some reduction in AIR of duty drawback. Few items like
gold and silver jewellery, silk yarn, silk fabric, silk garments and made-ups,
wooden art-ware etc. shall see an increase in AIR.
- The residuary AIR of 1% (composite) and 0.3% (customs) is being provided to
hitherto Nil rated items under chapters 4, 15, 22, few items in chapter 24 and
casein and its derivatives in chapter 35. AIR is being provided to articles of
silver (silversmiths’ wares) subject to similar conditions as applicable to
gold/silver jewellery and the Notes and Conditions (22)/(23) of the said
Notification shall also have relevance.
- The specific rate provided to Ethanol/ENA under tariff item no. 22071090 is
being changed to ad valorem 1% (composite) and 0.3% (customs). Ad valorem rates
are being provided to certain items of chapter 37 and imitation jewellery of
chapter 71.
- Though, the existing residuary rate of 1% ad valorem (composite) and 0.3%
(customs) continues, the higher residuary rates are being reduced from 1.5% to
1.3% (customs) or from 2% to 1.7% (customs), as the case may be.
- The process of realignment of rates, on items incorporated in the drawback
schedule from the erstwhile DEPB scheme, is continued along with rationalizing
these rates. In general, these items shall see a reduction in the AIR, including
some to the applicable residuary rate. In the case of certain electronic goods
of chapter 84, 85 or 93, the residuary rate is being provided at 1% (customs).
- In the case of most tariff items with ad valorem all industry rates above
2%, the rates are being supplemented with drawback caps.
- Separate tariff entries are being created for cotton bags, grey and dyed
knitted fabrics of cotton, of MMF, of blend where cotton predominates and of
blends where MMF predominates, grey and dyed cotton fabrics with lycra,
women’s/girls’ tops, embroidered fabrics of MMF, imitation jewellery of glass,
multi-speed complete bicycle with geared hubs, cranks made of aluminum, single
speed chain wheel and crank (crank made of aluminum), pillows/cushions/quilts/pouffles
filled with poly-fil/polyfill, etc. A few tariff items are also being replicated
with same rates and caps under different four digit levels and descriptions of
certain tariff items are being modified to address classification issues.
- AIR on wheat is being made Nil. Amendments vide
Notification No. 97/2013-
Customs (N.T.), dated 14.09.2013 shall also make the brand rate unavailable on
export of wheat.
- For entries in the Schedule that are related to pharmacopeia, where the
product descriptions bear suffix like IP and/or BP and/or USP, it is hereby
clarified that the pharmacopeia standards IP, BP, USP, EP, JP shall be treated
as inter-changeable.
- Commissioners are expected to ensure that the due diligence is exercised to
prevent any misuse. As before, it may be ensured that exporters do not avail of
the refund of service tax paid on taxable services which are used as input
services in the manufacturing or processing of export goods through any other
mechanism while claiming AIR. Moreover, there is need for continued scrutiny for
preventing any excess drawback arising from mismatch of declarations made in the
Item Details and the Drawback Details in a shipping bill. For example, when
quantities declared in Item details and Drawback details are same, but units of
their measurement are different, or unit of measurement is same but quantities
declared do not match or the 4-digit RITC in the Item Details and Drawback
Tariff Item No. in Drawback Details are different.
- It is requested to download the notification with the revised Schedule of AIR
effective 21.09.2013 from Board’s website (www.cbec.gov.in) and carefully peruse
it and thereby take note of all the specific changes notified. While every
effort has been made to avoid errors / omissions, these are not ruled out. If an
error is noticed, please immediately inform the Board for appropriate corrective
action. Difficulties faced, if any, in implementation of the changes may also be
brought to Board’s notice. In cases where the drawback caps have not been
provided against a particular tariff item, suggestions may be sent to the Board.
In the case of export of articles of silver (silversmiths’ wares), which are
high value items, there should be close monitoring and a monthly report
indicating quantum of export and drawback availed may be sent to the Board for
the next 12 months by the Commissioners having jurisdiction over the relevant
Custom Houses. Suitable public notice and standing order may be issued for
guidance of the trade and officers. Receipt of this Circular may be
acknowledged.
(Rajiv Talwar)
Joint Secretary
F. No. 609/115/2013-DBK
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